Capitol Indemnity, Inc. v. Brown

581 S.E.2d 339, 260 Ga. App. 863, 2003 Fulton County D. Rep. 1216, 2003 Ga. App. LEXIS 450
CourtCourt of Appeals of Georgia
DecidedMarch 27, 2003
DocketA02A1982
StatusPublished
Cited by10 cases

This text of 581 S.E.2d 339 (Capitol Indemnity, Inc. v. Brown) is published on Counsel Stack Legal Research, covering Court of Appeals of Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Capitol Indemnity, Inc. v. Brown, 581 S.E.2d 339, 260 Ga. App. 863, 2003 Fulton County D. Rep. 1216, 2003 Ga. App. LEXIS 450 (Ga. Ct. App. 2003).

Opinions

Ruffin, Presiding Judge.

On February 14, 1999, Derrick Whiting shot James Brown, Jr. in the chest at a sports bar known as Jin’s Grill. Brown sued West Atlanta Investigations & Security, Inc. (“West Atlanta”), the firm that provided security at the bar, alleging that West Atlanta’s negligent hiring, retention, training, and supervision of security guards, as well as its negligent provision of security services, proximately caused his injuries.1 The complaint sought both compensatory and punitive damages.

Capitol Indemnity, West Atlanta’s general liability insurance carrier, subsequently filed this declaratory judgment action, asserting that its insurance policy does not cover Brown’s claims. Following discovery, Capitol moved for summary judgment. The trial court denied Capitol’s motion, but issued a certificate of immediate review. We granted Capitol’s application for interlocutory appeal, and this appeal ensued. For reasons that follow, we reverse.

Summary judgment is appropriate when the “pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to [864]*864any material fact and that the moving party is entitled to a judgment as a matter of law.”2 The facts in this case are largely undisputed.

On the date of the shooting, West Atlanta was insured through a general liability insurance policy issued by Capitol. That policy, referred to as a “Commercial General Liability Coverage Part,” consists of numerous forms. The 13-page “Commercial General Liability Coverage Form” outlines the basic coverage, exclusions, conditions, and definitions. The policy also has other forms and endorsements that, as stated in the schedule listing them, are “applicable to all premises and coverages” under the Commercial General Liability Coverage Part. The list includes: “EXCLUSION — ASSAULT OR BATTERY,” “EXCLUSION — PUNITIVE OR STATUTORY DAMAGES,” and an endorsement for “DETECTIVE AGENCY OR SECURITY GUARD ERRORS AND OMISSIONS/PROFESSIONAL LIABILITY COVERAGE” (“the E&O endorsement”). These two exclusions and the E&O endorsement are the focus of this dispute.

The assault or battery exclusion cautions that it changes the policy terms for the Commercial General Liability Coverage Part. Pursuant to the exclusion:

[Capitol has] no duty to defend or indemnify any insured or any other person against any claim or suit for bodily injury, property damage, personal injury or advertising injury, including claims or suits for negligence [,]3 arising out of or related to any: 1. Assault; 2. Battery; 3. Harmful or offensive contact; or 4. Threat. . . . For purposes of this exclusion, negligence includes but is not limited to claims for negligent: 1. Hiring; 2. Employment; 3. Training; 4. Supervision; or 5. Retention.4

The punitive damages exclusion similarly warns that it changes the Commercial General Liability Coverage Part and explicitly exempts from coverage punitive, exemplary, and statutory damages. As stated in the exclusion, “[t]his policy covers only compensatory damages.”5

The E&O endorsement, which provides detective agency/security [865]*865guard professional liability coverage, modifies the Commercial General Liability Coverage Part. The endorsement states:

The insurance provided under this policy shall apply to sums which any insured shall become legally obligated to pay as damages arising out of the rendering or failing to render professional services during the policy period in the conduct of the named insured detective agency or security guard operations.

The parties do not dispute that Whiting assaulted Brown, and the record shows that Whiting pled guilty to aggravated assault on July 7, 1999. Citing that fact, as well as the exclusions for assault or battery and punitive damages, Capitol moved for summary judgment. Brown and West Atlanta opposed the motion, arguing below, as they argue on appeal, that the assault or battery exclusion only applies to conduct by West Atlanta employees and that the E&O endorsement specifically covers Brown’s claims. The trial court denied Capitol’s motion.

1. We first consider whether the assault or battery exclusion applies to assaults by individuals other than West Atlanta employees. In construing West Atlanta’s insurance policy, we are governed by the ordinary rules of contract interpretation.6 Although we must look for the parties’ intent, we cannot search for such intent outside the terms of a clear and unambiguous contract.7 Furthermore,

[w]hen the language of an insurance policy defining the extent of the insurer’s liability is unambiguous and capable of but one reasonable construction, the courts must expound the contract as made by the parties. Courts have no more right by strained construction to make an insurance policy more beneficial by extending the coverage contracted for than they would have to increase the amount of coverage.8

By its clear terms, the assault or battery exclusion applies to any claim or suit for bodily injury arising out of or related to an assault. The policy defines “bodily injury” as “bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.” In his complaint, Brown sought recovery for damages relating to bodily injuries he sustained in the shooting. But for the assault, Brown would not have a cause of action, since the inju[866]*866ries would never have occurred. His claims thus fall directly within the exclusion.9

On appeal, West Atlanta argues that because the exclusion refers to negligent employment practices, the parties intended that it apply only to assaults by West Atlanta employees. We disagree. As noted above, the exclusion specifically encompasses any claim arising out of an assault or battery. Although the exclusion clearly applies to an assault by a negligently employed security guard, nothing in the provision limits it to such assaults or exempts third-party assaults from its reach. And, as shown by Brown’s complaint, a third-party assault can form the basis of a negligent employment claim against West Atlanta. Under these circumstances, we cannot accept West Atlanta’s extremely narrow interpretation of the exclusion.10

2. Brown and West Atlanta further argue that, even if the assault or battery exclusion applies, the exclusion conflicts with the E&O endorsement, rendering the insurance policy ambiguous and creating a jury question.11 Again, we disagree.

“[A]n insurance policy must'be construed as a whole, and all of the provisions should be . . . interpreted so as to harmonize one with the other.”12 Read as a whole, the Commercial General Liability Coverage Part establishes broad liability coverage. The E&O endorsement modifies and extends that coverage to include professional liability claims arising out of West Atlanta’s security guard operations. The policy then limits its broad coverage through various exclusions, which carve finite classes of claims out of the contract. One of those exclusions relates to assault and battery.

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Capitol Indemnity, Inc. v. Brown
581 S.E.2d 339 (Court of Appeals of Georgia, 2003)

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Bluebook (online)
581 S.E.2d 339, 260 Ga. App. 863, 2003 Fulton County D. Rep. 1216, 2003 Ga. App. LEXIS 450, Counsel Stack Legal Research, https://law.counselstack.com/opinion/capitol-indemnity-inc-v-brown-gactapp-2003.